** post 2 replies of at least 200 words  ** In your replies, discuss whether or

** post 2 replies of at least 200 words 
** In your replies, discuss whether or not you would invest in your classmates’ companies and why or why not. 
**For each thread, students must support their assertions with at least 2 scholarly
citations in APA format. Each reply must incorporate at least 2 scholarly citations in APA
format. Any sources cited must have been published within the last five years. Acceptable
sources include peer-reviewed sources.
1st post
 
The company that I have chosen PepsiCo, Inc. is a leading global food and beverage company. I’ve reviewed PepsiCo’s financial statements for the past three years to assess its financial performance. Based of this analysis, I will evaluate key financial ratios and trends to determine whether PepsiCo remains a strong investment opportunity.
Revenue and Profit Trends
From 2021 to 2023, Pepsi’s revenue has shown consistent growth. In 2023, Pepsi reported revenues of $92.5 billion, a 7.7% increase for the previous year’s $85.5 billion (PepsiCo Annual Report, 2023). This growth was largely driven by price increase across its products, particularly in its snack food segment, and higher sales volumes in its beverage division. The increase in revenue was also supported by strategic acquisitions, such as the purchase of SodaStream, which helped diversity PepsiCo’s portfolio.
However, net income has faced some fluctuation. In 2023, PepsiCo posted a net income of $9.2 billion, a modest increase form $8.7 billion in 2022. This reflects a consistent profit margin of about 10%, although this is down slightly from 2021 when the company recorded $10 billion in net income. This decrease is profitability is largely attributed to higher operational costs, including rising raw material costs and supply chain disruptions.
Ratios
 Profitability ratios: PepsiCo’s return on assets (ROA) and return on equity (ROE) have remained relatively stable over the past three years. In 2023, Pepsi ROA was 6.8%, and ROE was 44.1%, including that the company is efficiently using its assets and equity to generate profits. These ratios are above industry averages, signing solid profitability.
Liquidity Ratios: PepsiCo’s current ratio, a measure of short-term liquidity, stood at 1.1 in 2023, consistent with previous years. A ratio above 1 indicates that PepsiCo can cover its short-term liabilities with its current assets, though a ratio closer to 2 would provide more cushion. While this is not a concerning level, it does suggest that the company operates with a leaner liquidity position, which might limit its flexibility in times of financial distress.
Leverage Ratios: PepsiCo’s debt-to-equity ratio has risen from 2.3 in 2021 to 2.5 in 2023, signaling a gradual increase in leverage. While this increase is not drastic, it could suggest a greater reliance on debt financing, which introduces higher financial risk. Nevertheless, PepsiCo’s strong cash flow and established market position allow it to manage this debt efficiently.
Expense Trends
PepsiCo’s major expenses include cost of goods sold (COGS) and selling, general, and administrative expenses 9SG&A). COGS has increased in line with the growth in revenue, as inflationary pressures and higher ingredient costs have impacted margins. SG&A expenses have also risen, reflecting PepsiCo’s investment in marketing, innovation, and its growing ecommerce segment.
Investment consideration
Despite some challenges in profitability, I would consider investing in PepsiCo. The company has demonstrated solid revenue growth, consistent cash flow, and a well-diversified product portfolio. Although its debt levels have increased, PepsiCo’s ability to maintain profitability and its strong brand recognition make it a relatively low-risk investment in the consumer goods sector.
References
PepsiCo. (2023). PepsiCo Annual Report 2023. Retrieved from https://www.pepsico.comLinks to an external site..
Morningstar. (2023). PepsiCo, Inc. Financials. Retrieved from https://www.morningstar.comLinks to an external site..
2ND POST
 
Verizon Communications Inc. (VZ) is a leading telecommunications company that provides wireless, fiber-optic, and global network services to consumers, businesses, and government entities. In analyzing Verizon’s financial statements from 2020 to 2022, several key trends emerge that provide insight into the company’s financial health and performance (Verizon, 2024). The company’s annual reports reveal consistent revenue streams, with some fluctuations driven by market dynamics and technological investments. Verizon’s financial statements demonstrate a stable business model with revenues that reflect the essential nature of telecommunications services. The company is committed to strategic investments in next-generation technology and digital infrastructure, critical for long-term competitive positioning in the rapidly evolving telecommunications market.
          I conducted a comprehensive analysis of Verizon’s financial performance using key financial ratios. The current ratio indicates adequate liquidity management and demonstrates the company’s capacity to satisfy short-term financial obligations. Verizon’s debt-to-equity ratio suggested a capital structure typical of large telecommunications companies with a balanced approach to financial leverage (Verizon, 2024). The return on equity demonstrated the company’s efficiency in generating profits from shareholder investments, reflecting strong management practices. The net profit margin was consistent with industry standards, showcasing Verizon’s operational efficiency and ability to control costs while maintaining profitability. The company’s operating cash flow remained strong, providing stability and supporting ongoing capital expenditures and shareholder returns.
          Verizon’s income statements reveal nuanced insights into the company’s financial dynamics. Total operating revenues showed modest growth over the three years, reflecting steady market performance and the company’s ability to maintain its market position. Operating expenses remained proportional to revenues, with significant investments in network infrastructure, technology upgrades, and employee compensation (Verizon, 2024). Net income remained relatively stable, indicating resilient profitability in a competitive market. The company’s strategic focus on cost management and operational efficiency has been evident in its financial approach. Major expense categories included network and technology investments, marketing and sales expenses, and administrative costs, which were carefully managed to preserve profit margins and competitive advantage.
          I would cautiously recommend Verizon as a potential investment opportunity from an investment perspective. The company’s consistent financial performance and critical role in the telecommunications infrastructure make it an attractive option for investors seeking stability. Verizon’s ongoing investments in next-generation technology and digital transformation position it well for future growth and market adaptation (Bryja, 2022). The company’s robust cash flow, consistent profitability, and strong market position provide a sense of security for potential investors. However, potential investors should also consider challenges such as intense market competition, potential regulatory changes, and the substantial capital expenditures required to maintain technological relevance. While Verizon may not offer explosive growth, it represents a relatively stable investment with predictable returns, making it suitable for investors seeking income and moderate capital appreciation.
References
Bryja, D. (2022). Verizon Communications Inc Investment Report. https://ecommons.luc.edu/cgi/viewcontent.cgi?article=1552&context=ures
Verizon. (2024). Verizon annual reports. https://www.verizon.com/about/investors/annual-report